Co-Founder and former CEO Rick Brar will continue to contribute as a
Special Advisor
VANCOUVER, Jan. 21, 2019 /CNW/ - Zenabis Global Inc.
("Zenabis") (TSXV: ZENA) announced today that it has appointed
Andrew Grieve as Chief Executive
Officer, effective immediately. Rick
Brar, Zenabis' Co-Founder and former CEO, will continue to
contribute and join fellow Co-Founder Mark
Catroppa as a Special Advisor. In addition,
shareholders of Zenabis holding ~10% of the common shares have
entered into the existing Pooling Agreement with the result that
~67% of the currently outstanding common shares are subject to
Pooling Agreement restrictions on disposition. Finally,
Zenabis has also entered into a credit agreement with a major
Canadian chartered bank for an aggregate of $51m. ~$12m will be drawn to fund
the completion of Zenabis' Topgro acquisition.
CEO Appointment
"With the completion of the recent listing and Zenabis' entering
the next phase of its growth, as a publicly traded company, the
Board has appointed a CEO with extensive experience in
organizational leadership and the execution of complex
transactions," said Zenabis Board Chair Monty Sikka. "Andrew
Grieve stood apart as a business and military leader with an
extraordinary ability to connect vision, people, and ideas to
achieve the intent of our organization. Andrew's experience as both
an entrepreneur and as financial advisor on multi-billion-dollar
transactions is exactly what Zenabis requires as we enter this new
phase of growth."
Mr. Grieve is a Co-Founder of Agentis Capital, and as Co-Head of
Advisory at Agentis Capital has advised on more than $20 billion of completed acquisition, financing,
and project development transactions across a wide range of
sectors, from infrastructure to technology and industrials. These
financial advisory transactions include multi-billion dollar
construction or infrastructure projects with counterparties such as
the Maryland and Colorado
Departments of Transportation, and clients such as the Canada
Pension Plan Investment Board, the Public Service Pension Plan of
Canada, and major international
construction firms. Mr. Grieve has led many of Agentis Capital's 18
principal investments, including investments where he has taken on
an extensive operational role. Mr. Grieve has been an officer in
the Canadian Army Reserve for 15 years, and he is currently a Major
and the Battery Commander of 68 Battery, 15th Field
Artillery Regiment, The Royal Regiment of Canadian Artillery.
For the past nine months, Mr. Grieve and Mr. Brar have been the
primary architects behind the transaction to create Zenabis, and
will continue to collaborate, combining their respective strengths
to achieve Zenabis' full potential. Mr. Grieve and Mr. Brar worked
closely on developing the strategy, vision, and organizational
design of Zenabis as they successfully completed the Zenabis
Transaction, with ZENA debuting on the TSXV on January 10, 2019.
"This is the perfect time for Andrew to become Zenabis' Chief
Executive Officer," said Mr. Brar, Co-Founder and former CEO. "With
Zenabis becoming a public company, Andrew has the experience
necessary to translate financial understanding, leadership, and
organizational design into world-class execution. Andrew is a
champion of the Zenabis culture and has proven his complete
commitment to supporting Zenabis' values. I look forward to
continuing to contribute to Zenabis as a Special Advisor."
"I am grateful to the Board of Directors for putting their faith
in me and asking me to serve as CEO," said Mr. Grieve. "The values
of Zenabis are my values: excellence, responsibility, compliance
with the law, and delivery of stakeholder value. I am excited to be
working with a management team that shares these values, and shares
the vision that Rick and I conceived of nine months ago. I look
forward to faithfully executing my role serving the shareholders of
Zenabis."
Mr. Grieve will forego short-term annual salary and bonus
compensation and instead receive long-term compensation consisting
of:
- 750,000 options granted in connection with his appointment,
exercisable at current market price and vesting over three years;
and
- A performance incentive payment (the "PIP") comprised of two
components:
-
- A share of EBITDA generated in 2020 above $0.42 per share (subject to certain adjustments
or debt outstanding); and
- A share of EPS generated in 2020 above $0.16 per share.
The PIP is payable in four equal installments on a quarterly
basis from June 2021 through
March 2022, and at each payment date
is only payable to the extent the share price exceeds a specified,
increasing threshold that was fixed on the basis of the current
5-day VWAP. Mr. Sikka stated, "Andrew proposed a compensation plan
that was solely performance based and ensured alignment with the
creation of long-term shareholder value."
In connection with Mr. Grieve joining Zenabis as CEO, Zenabis
has also agreed to enter into a separate agreement with Agentis
Capital Partners in order to continue to receive financial advisory
services from Agentis. The financial advisory agreement is
for a term of one year and is intended to assist Zenabis in its
participation in the anticipated industry consolidation over the
coming year. Agentis will receive customary, market-based,
success fee payments on completion of financings, acquisitions and
dispositions during the term of the agreement.
Pooling Agreement
In addition, a number of major shareholders in Zenabis holding
~10% of the currently outstanding common shares have executed
joinders to the Pooling Agreement initially described in Zenabis'
press release dated December 21,
2018. This results in ~67% of the common shares currently
outstanding being subject to the restrictions on disposition set
out in the Pooling Agreement. The Pooling Agreement generally
provides for the release of the shares thereunder over a 15 month
period: 1% of the shares deposited thereunder for each of the first
3 months, 7.5% of the shares thereunder for each of the following 6
months and 8.75% of the shares thereunder for each of the 6 months
thereafter. Mr. Grieve commented, "I am excited that several
additional shareholders provided this vote of confidence in Zenabis
by joining the Pooling Agreement."
Credit Facility and Topgro Acquisition
Finally, Zenabis has also entered into a credit agreement with a
major Canadian chartered bank for an aggregate of $51 million, of which $46,700,000 is a term loan, $2,000,000 is a revolving line of credit,
$2,000,000 is a hedging facility, and
$300,000 is available on corporate
credit cards. Zenabis expects to draw ~$33 million today to repay existing indebtedness
to Farm Credit Canada, repay existing equipment loans and to fund
Zenabis' Topgro Acquisition.
The credit agreement and the facilities thereunder are described
in greater detail in a separate press release also dated
January 21, 2019. Zenabis also
expects to disseminate a press release on imminent completion of
its Topgro acquisition, providing greater detail regarding the
previously-announced Topgro acquisition, including a breakdown of
the acquisition cost.
Zenabis – Key Corporate Milestones
- On September 17, 2018, Zenabis
submitted its application package to license the Langley greenhouse for cannabis production,
which is currently under active review.
- In October 2018, Zenabis became a
founding partner of the Centre for Medicinal Cannabis ("CMC"), a UK
based non-profit organization advocating, educating and lobbying
for the implementation of a fair, responsible, and evidence-based
medicinal cannabis regime within the National Health System in the
United Kingdom.
- Since October 2018, five
additional flower rooms and 19 total rooms have been approved by
Health Canada for cannabis activities and are in operation.
- On December 22, 2018, Zenabis
submitted its cultivation license application for its Stellarton facility, which is currently under
active review.
- On January 9, 2019, Bevo Agro
Inc. and Sun Pharm Investments Ltd. completed the reverse takeover
contemplated on October, 4, 2018, to become Zenabis Global
Inc.
- On January 20, 2019, Zenabis
executed a $51m credit agreement with
a Canadian Chartered bank
- As of January 21, 2019, Zenabis
has secured purchase orders from government and third-party
retailers/distributors in New
Brunswick, Nova Scotia,
British Columbia, Saskatchewan, and the Yukon Territory.
About Zenabis
Zenabis is a significant licensed cannabis cultivator of medical
and recreational cannabis, and employs staff coast-to-coast, across
facilities in Atholville, New
Brunswick; Delta and
Langley, B.C.; and Stellarton, Nova Scotia. In addition to
gaining technologically advanced knowledge of plant propagation,
the recent addition of state of the art greenhouses in Langley provides Zenabis with 3.5 million
square feet of facility space that can, upon full conversion, be
dedicated to cannabis production space.
If all facility space is dedicated to production, Zenabis will
own, and have access to, 660,000 square feet of high quality indoor
cannabis production space, as well as 2.1 million square feet of
greenhouse space at its Langley
facility (an additional 700,000 square feet of greenhouse space
will be used to continue the existing propagation business, to be
converted at such a time that is beneficial to the strategic
position of the company), strategically positioned on Canada's coasts. These facilities, if fully
converted for cannabis production, would have the design capacity
to yield 479,700 kg of dried cannabis annually, for both national
and international market distribution. The Zenabis brand
name is used among the medical space, while Namaste is used
to service the recreational market.
The management team at Zenabis has significant experience in
finance, agriculture, technology, pharmaceutical sales, consumer
packaged goods, international distribution and brand marketing.
Leadership is backed by the expertise of a Chief Growing Officer, a
Chief Science Officer and Chief Medical Officer. As evidenced by
letters of intent with strategic partners, and purchase orders with
governments and distribution partners, Zenabis has been proven as a
trusted and innovative cannabis front-runner.
This news release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking information may
include, among others, statements regarding the future plans,
costs, objectives or performance of Zenabis, or the assumptions
underlying any of the foregoing. In this news release, words such
as "may", "would", "could", "will", "likely", "believe", "expect",
"anticipate", "intend", "plan", "estimate" and similar words and
the negative form thereof are used to identify forward-looking
statements. In this news release, forward-looking statements
relate, among other things, to: future production capacity of
Zenabis; conversion, expansion and optimization of existing
facilities; future products of Zenabis; future production costs of
Zenabis; anticipated use of funds under its credit facility and
expected completion of its Topgro acquisition. Forward-looking
statements should not be read as guarantees of future performance
or results, and will not necessarily be accurate indications of
whether, or the times at or by which, such future performance will
be achieved. No assurance can be given that any events anticipated
by the forward-looking information will transpire or occur.
Forward-looking information is based on information available at
the time and/or management's good-faith belief with respect to
future events and are subject to known or unknown risks,
uncertainties, assumptions and other unpredictable factors, many of
which are beyond Zenabis' control. These risks, uncertainties and
assumptions include, but are not limited to, those described
Zenabis Management Information Circular dated November 23, 2018, a copy of which is available
on SEDAR at www.sedar.com, and could cause actual events or results
to differ materially from those projected in any forward-looking
statements. Furthermore, any forward-looking information with
respect to available space for cannabis production is subject to
the qualification that management of Zenabis may decide not to use
all available space for cannabis production, and the assumptions
that any construction or conversion would not be cost prohibitive,
required permits will be obtained and the labour, materials and
equipment necessary to complete such construction or conversion
will be available. Accordingly, readers should not place undue
reliance on the forward-looking statements and information
contained in this news release. Zenabis does not intend, nor
undertake any obligation, to update or revise any forward-looking
information contained in this news release to reflect subsequent
information, events or circumstances or otherwise, except if
required by applicable laws.
For more information,
visit: https://www.zenabis.com
SOURCE Zenabis Global Inc.